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FINAL ORDER OF DISMISSAL- SETTLEMENT OAH: (253) 476-6888 Docket No. 08-2019-INS-00064 Page 1 of 2 8210-SCP
WASHINGTON STATE OFFICE OF ADMINISTRATIVE HEARINGS
In the matter of: Ace American Insurance Co. and Indemnity Insurance of North America,
Respondent.
Docket No. 08-2019-INS-00064 FINAL ORDER OF DISMISSAL-SETTLEMENT
Agency: Office of the Insurance Commissioner
Agency No. 19-0231
On January 21, 2020, the Office of the Insurance Commissioner (OIC) sent
correspondence to the Office of Administrative Hearings (OAH) informing OAH that
the OIC and Ace American Insurance Company and Indemnity Insurance of
North America (Respondent) have resolved all issues in the present appeal, via a
‘Consent Order Levying Fine’, dated January 15, 2020. As a part of the ‘Consent Order’,
the Respondent agreed to withdraw its appeal. On January 17, 2020, OIC Insurance
Commissioner, Mike Kreidler, through Insurance Enforcement Specialist,
Daniel Jacobs, approved the ‘Consent Order’.
Based on the parties’ settlement, via ‘Consent Order’, no issue remains for resolution
by OAH. As a result, the present matter is DISMISSED. The evidentiary hearing,
scheduled for July 13, 2020 to July 17, 2020, is STRICKEN.
Now, Therefore,
IT IS ORDERED:
1. The present matter is DISMISSED.
2. All hearing dates, including the evidentiary hearing, scheduled for July 13, 2020
to July 17, 2020, are STRICKEN.
SERVED on the date of mailing.
TJ Martin Administrative Law Judge Office of Administrative Hearings
CERTIFICATE OF SERVICE ATTACHED
FINAL ORDER OF DISMISSAL- SETTLEMENT OAH: (253) 476-6888 Docket No. 08-2019-INS-00064 Page 2 of 2 8210-SCP
CERTIFICATE OF SERVICE FOR OAH DOCKET NO. 08-2019-INS-00064
I certify that true copies of this document were served from Tacoma, Washington via Consolidated Mail Services upon the following as indicated:
Ace American Insurance Company and Indemnity Insurance Company of North America c/o John Marlow 436 Walnut Street Philadelphia, PA 19106 Respondent
☒ First Class Mail ☐ Certified Mail, Return Receipt ☐ Hand Delivery via Messenger ☐ Campus Mail ☐ Facsimile ☐ E-mail
Timothy S. Farber, Steven T. Whitmer Locke Lord LLP 111 South Wacker Drive Chicago, IL, 60606 Respondent Representative
☒ First Class Mail
☐ Certified Mail, Return Receipt ☐ Hand Delivery via Messenger ☐ Campus Mail ☐ Facsimile ☐ E-mail
Daniel Jacobs Office of the Insurance Commissioner (OIC), Legal Affairs Division MS:40255 P.O. Box 40255 Olympia, WA 98504 Agency Representative
☐ First Class Mail ☐ Certified Mail, Return Receipt ☐ Hand Delivery via Messenger ☒ Campus Mail ☐ Facsimile ☐ E-mail
Rebekah Carter Office of the Insurance Commissioner MS: 40255 PO Box 40255 Olympia, WA 98504 Agency Contact
☐ First Class Mail ☐ Certified Mail, Return Receipt ☐ Hand Delivery via Messenger ☒ Campus Mail ☐ Facsimile ☐ E-mail
Date: Wednesday, January 22, 2020 OFFICE OF ADMINISTRATIVE HEARINGS
Carla Sullivan Legal Assistant 2
09:~7:o~ ~.m. 01-21-2020 I 1 I
JAN/21/2020/TUE 10:59 AM
MIKI> KII.EIDLER STATE INSURANCE COMMISSIONER
FAX No.
STATE OF WASHINGTON
OFFICE OF INSURANCE COMMISSIONER
FAX COVER SHEET
January 21, 2020
Please deliver the following 12 pages plus cover sheet:
TO: TJ Martin, Adm.inistrative Law Judge Office of Administrative Hearings
FAX No: (253) 593-2200
COMMENTS:
P. 001
LEGAL AFF AJRS P!VISION P.O. Box 40255
Olympia WA 98504-0255 fax No. (360) 586-0152
In Re: ACE American Insurance Company and Indemnity Insurance Company of North America OAH Docket No. 08-2019-INS-00064; Agency No. 19-0231
This matter has been resolved between ACE American Insurance Company and Indemnity Insurance Company of North America, collectively known as the Chubb Group (Collectively referred to as "the Companies") and the OIC. Pending your review, the Hearing scheduled for July 13, 2020 to July 17, 2020, is no longer necessary.
The OIC respectfully request that you enter an appropriate order terminating the hearing and forward the same to the parties as soon as possible. The first 12 pages of the Consent Order Levying a Fine, Order No. 19-0231 resolving this matter between the Companies and the OJC is attached. A copy of the full Order is being mailed to OAH today.
FROM: Fax No.: (360) 664-2782 Voice No.: (360) 725-7064
If there is a problem receiving this fax or with the partial filing, please call Daniel Jacobs at (360) 725-7064.
NOTE: THIS FAX TRANSMISSION IS INTENDED ONLY FOR THE ADDRESSEE SHOWN ABOVE. IT MAY CONTAIN INFORM A TJON THAT IS PJ.UVJLEGED, CONFJJJENTLAL, OR OTH.ERWJSE PROTECTED FROM DISCLOSURE. ANY REVJ.EW, DISSEMINATION,:OR USE OF THIS TRANSMISSION OR ITS CONTENTS BY PERSONS OTHER THAN THE ADDRESSEE IS STRICTLY PROHIBITED. Il' YOU HAVE RECEIVED nus TRANSMISSION IN ERROR, PLEASE NOT!l'Y us IMMEDIATELY BY TELlWHONE ANP MAIL 1;liE ORIGINAL TO OS AT TH.E ABOV/l ADDRESS. THANK YOU.
Rev. 01/21/20
09:~7:o~ ~.m. 01-21-2020 I 2 I
JAN/21/2020/TUE 10:59 AM FAX No. P. 002
001L10027:i 01./l6/W20 '150,000.00
STATE OF WASHINGTON OFFICE OF THE INSURANCE COMMISSIONER
In the Matter of
ACE AMERICAN INSURANCE COMPANY,
and
INDEMNITY INSURANCE COMPANY OF NORTH AMERICA,
Authorized Insurers,
Order No.
WAOICNo. NAICNo.
WAOICNo. NAICNo.
19-0231
265 22667
58673 43575
CONSENT ORDER LEVYING A FINE
This Consent Order Levying a Fine ("Order") is entered into by the Insurance
Commissioner of the state of Washington ("Insurance Commissioner"), acting pursuant to the
authority set forth in RCW 48.02.060, RCW 48.05. 140, and RCW 48.05.185, and ACE American
Insurance Company and Indemnity Insurance Company of North America. This Order is a public
record and will be disseminated pursuant to Title 48 RCW and the Insurance Commissioner's
policies and procedures.
BASIS:
1. ACE American Insurance Company ("ACE") is an authorized insurer, domiciled
in Pennsylvania, and duly authorized to engage in the business of insurance in the state of
Washington.
2. Indemnity Insurance Company of North America ("Indemnity'') is an authorized
insurer, domiciled in Pennsyl_vania, and duly authorized to engage in the business of insurance in
the state of Washington.
3. ACE and Indemnity were originally part of the ACE Group of Companies, and are
now collectively known as the Chubb Group (collectively referred to as "the Companies"),
CONSENT ORDER LEVYING A FINE State of Washington ORDER NO. l9~0231 Office oflllsura.nce Commissione1·
PO Bo·x 40255 LA· 1589890- .1 Olytnpia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I ~ I
JAN/21/2020/TUE 10:59 AM FAX No. P. 003
4. The pet insurance at issue is administered by Healthy Paws Pet lnsmance, LLC,
W AOIC 7 56729 ("Healthy Paws"), through a General Agency Agreement dated October 1, 2012.
From January 17, 2013 until June 17, 2016, Healthy Paws produced policies underwritten solely
by ACE. From June 17, 2016 through the present, Healthy Paws has been placing these policies
with Indemnity. The policies originally underwritten by ACE were never transferred to Indemnity.
5. Per the Genernl Agency Agreement, Healthy Paws is responsible for sales and
marketing; website development and maintenance; policy quoting, issuance and servicing; and
claims adjudication. The Companies retain responsibility for rate and form filings and oversight
of Healthy Paws.
6. The Insurance Commissioner's Market Conduct Oversight unit ("Market
Conduct") uncovered the violations identified herein through a variety of market continuum
actions identified in RCW 48.37.040(4)(a). Market Conduct concluded that the oversight of
Healthy Paws was substantially nonexistent before the Insurance Commissioner opened a Market
Continuum Action in 2017.
Company Operation and Management
7. Healthy Paws failed to use ACE's legal name on all claims, policy service,
marketing emails, and Explanation of Benefits documents sent to consumers. While Healthy Paws
retained responsibility for marketing and sales per the General Agency Agreement, the Companies
retained responsibility for oversight of Healthy Paws, and thus, oversight of the marketing and
distribution of materials. Healthy Paws' website did not identify ACE nor its domicile.
8. RCW 48.05.\90(1) states that [e]very insurer shall conduct its business in its own
legal name. By allowing the Healthy Paws website to operate for at least four (4) years without
identifying ACE as the insurer, ACE repeatedly violated 48.05.190(1).
9. WAC 284-30-670(4) states that [e)ach insmer must have standards and procedures
to ensure that each consumer with whom they conduct an insurance transaction is informed of and
can consistently identify the legal name of the insurer. Each insurer must provide the Insurance
Commissioner with its standards and procedures and prnof of its compliance upon request. The
insurer must be able to show the legal name was prnvided when issuing policy documents, billing
statements, and other written communications regarding policy services, underwriting, and claims
and at the point during policy sales transactions when the company is determined. By allowing
CONSENT ORPER LEVYING A FINE OF.DER NO. 19-0231
LA- 1589890- I
2 State of Washington Office of Insurance Commissioner PO Box40255 Oly1npia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I 4 I
JAN/21/2020/TUE 10:59 AM FAX No. P. 004
Healthy Paws to send emails related to policy service items, communications related to claim
adjudication, and Explanation of Benefits statements, none of which identified the insurer, ACE
repeatedly violated WAC 284-3 0-670(4).
l 0. RCW 48.30.050 states that [e]very advertisement of, by, or on behalf of an insurer
shall set forth the name in full of the insurer and the location of its home office or principal office,
if any, in the United States (ifan alien insurer). By allowing Healthy Paws to distribute brochures
that did not identify ACE by name or provide ACE's domicile, and by failing to identify its legal
name on Healthy Paws' website, ACE repeatedly violated RCW 48.30.050.
Producer Activity
II. From June 18 through October 3, 2016, Healthy Paws was not appointed to
Indemnity, nor were any individual producers affiliated with Healthy Paws appointed to
Indemnity. During this time, there were 3,465 transactions, $27,508 in total commissions paid,
$125,908.00 in total premium received, and 1,283 policies bound.
12, RCW 48.17.160(1) states that [a]n insurance producer ortitleinsurance agent shall
not act as an agent of an insurer unless the insurance producet· or title insurance agent becomes an .
appointed agent of that insurer.
13. RCW 48.17.160(2) states that [t]o appoint an insurance producer or title insurance
agent as its agent, the appointing insm·er shall file, in a format approved by the Insurance
Commissioner, a notice of appointment within fifteen days from the date the agency contrnct is
executed or the first insurance application is submitted, whichever is earlier. By allowing Healthy
Paws to produce policies for Indemnity without being properly appointed, Indemnity repeatedly
violated RCW 48.17.160(2).
Policy and Administration
14. Since the program inception, all premium cancellations for non-payment processed
by the Companies failed to provide a compliant 10 day legal notification to the consumer. From
June 17, 2015 through March 30, 2018, ACE sent the non-compliant notice to 634 consumers.
From June 18, 2016 through March 30, 2018, Indemnity sent the non-compliant notice to 253
consumers.
CONSENT ORDER LEVY!NO A f!NE ORDER NO. 19-0231
LA. 1589890 • I
3 State of Washington Office ofinsuJ'ance Commissioner PO Box40255 Olympia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I ~ I
JAN/21/2020/TUE 11 :00 AM FAX No. P. 005
15. Policy language filed with and approved by the Insurance Commissioner allowed
the insured to cancel in writing, via regular mail, fax, email, or verbally at any time. In contrast,
the Healthy Paws website stated that cancellations had to be submitted in writing and had to be
submitted 14 days before the next scheduled premium payment. The more restrictive cancellation
requirements were also present in the Terms and Conditions document, while the Amendatory
Endorsement contains the less restrictive terms actually approved by the Insurance Commissioner.
16. RCW 48.J8,290(1)(c) states that [i]f an insurer cancels a policy [ ... ] for
nonpayment of premium, the insurer must deliver or mail the cancellation notice to the named
insured at least ten days before the effective date of the cancellation. By cancelling 634 consumer
policies from June 17, 2015 thrnugh March 30, 20 I 8 without providing a compliant IO day
advanced notice, ACE repeatedly violated RCW 48.18.290(1)(c). By cancelling 253 consumer
policies from June 18, 2016 through March 30, 2018 without providing a compliant 10 day
advanced notice, Indemnity repeatedly violated RCW 48. l 8.290(l)(c).
17. RCW 48.30.090 states that [n]o person shall make, issue or circulate, or cause to
be made, issued or circulated any misrepresentation of the terms of any policy or the benefits or
advantages promised thereby, or the dividends or share of surplus to be received thereon, or use
any name or title of any policy ot· class of policies misrepresenting th~ nature thereof. By allowing
Healthy Paws to circulate inaccurate information about the required cancellation procedure, and
by producing documents that contained inconsistent information on said cancellation procedure,
the Companies repeatedly violated RCW 48.30.090.
Forms
18. Indemnity used an outdated declarations page in its pet health insurance policy form
and pet health insurance notice from June 18, 2016 through October 12, 2016. The November2012
edition form had been used when it should have been the March 2015 edition form. Indemnity
used these outdated forms for I, 180 Washington consumers for 1,509 pets.
19. Since January 17, 2013, the Companies have used a pet health policy change form
containing the following language neither filed with, nor approved by, the Insurance
Commissioner;
THIS ENDORSEMENT WILL NOT BE USED (a) TO IMPEDE,
RESTRICT, OR AMEND OR OTHERWISE REVISE ANY
CONSENT ORDER LEVYING A FINE ORDER NO. 19-0231
LA-1589890-1
4 State of Washington Office oflnsura.nce Co1nmissioner PO Box 40255 Olympi•, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I o I
JAN/21/2020/TUE 11 :00 AM FAX No.
PROVISIONS, EXCLUSIONS OR OTHER TERMS OF THE POLICY
TO WHICH IT JS ATTACHED OR (b) AS A RENEWAL CERTIFICATE.
(emphasis added)
P. 006
Contrary to the explicit prohibition against such use, the pet health change form was used
as a renewal certificate as a general business practice. ACE generated and distributed 24,036 pet
health policy change forms with the unapproved language from June 17, 2015 through March 30,
2018. Indemnity generated and distributed 13,337 pet health policy change forms with the
unapproved language from June 18, 2016 through March 30, 2018.
20. RCW 48.18.140(2)(1) states that [a] policy shall specify the conditions pertaining
to the insurance,
21. RCW 48.18.520 states that [e]very insurance contract shall be construed accm·ding
to the entirety of its terms and conditions as set fo1th in the policy, and as amplified, extended, or
modified by any rider, endorsement, or application attached to and made a part of the policy.
22. RCW 48, 18.100( 1) states that [ n Jo insurance policy form or application form where
written application is required and is to be attached to the policy, or printed life or disability rider
or endorsement form may be issued, delivered, or used unless it has been filed with and approved
by the Insurance Commissioner. By using an outdated declarations page in its pet health insurance
policy form and pet health insurance notice and using these forms for 1,180 Washington consumers
for 1,509 pets, Indemnity repeatedly violated RCW 48.18.140(2)(1), RCW 48.18.520 and RCW
48, 18.100(1 ), By using pet health policy.change forms as renewals despite the explicit prohibition
against such use in the language of the form itself, ACE repeatedly violated RCW 48.18.140(2)(f),
RCW 48.18.100(1), and RCW 48.18.520. By using pet health policy change forms as renewals
despite the explicit prohibition against such use in the language of the form itself, Indemnity
repeatedly violated RCW 48.18.140(2)(1), RCW 48.18.100(1), and RCW 48.18.520.
Rates
23. ACE used rates different from those filed with and approved by the Insurance
Commissioner from June l 7, 20 I 5 through March 31 2018 as follows: ' '
Approved Used
Dog $20.32 $31.25
Cat $ l 1.81 $ l 8. l 6
24. ACE implemented the incorrect rates in all 11,470 policies issued.
CONSENT ORDER LEVYING A FINE ORDER NO, 19-0231
LA-1589890-1
5 State of Washington Office of Insurance Co1nrnlssioner PO Box 40255 Olytnpia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I 7 I
JAN/21/2020/TUE 11 :00 AM FAX No. P. 007
25, ACE amended the base rates contrary to the filed and approved experience rating
plan, which allowed ACE to raise rates based on a formula. ACE actually implemented rates lower
than what the formula would indicate, which also violates RCW 48.19.040(6), despite doing so in
a consumer-friendly manner.
26. The filed and approved rate filing allows up to a 10% discount for "affinity groups"
and up to a 5% discount for weight control risk management. Due to a programming en·o1·, the
Companies capped the total allowable discount at 10% collectively, despite no such limitation in
the filed and approved language.
27. Healthy Paws applied the affinity group discount with no supporting documentation
and in some cases, when the discount should not have been applied at all. Upon reviewing a sample
of 120 policies from the Companies collectively, Market Conduct found that 45 of them (37.5%)
were applied with no supporting documentation.
28. The Companies, modified the rates of the policies in what they called an
"anniversary adjustment," also known as a renewal. Any rate modification notification to a
consumer has to occur 20 days prior to the renewal date per RCW 48.18.2901(1)(6). The
Companies never provided a compliant advance notice, thus violating the legal requirements on
all renewal notices sent out by the Companies,
29. ACE's various mte errors billed l 1,470 Washington policies as follows: Exnected Premium Using Aooroved Rates $6.261.630 Premium Collected $10.614.888 Difference (overcharge) $4.353.258 Difference plus 8% interest $ 4.572,710
30, Indemnity increased its base rates using an experience rating factor, and as with
Ace, implemented a lower rate than indicated in the approved plan. Indemnity began using the
experience rating plan in new business on March 31, 2017, and renewals on June 18, 2017,
31. Per the language filed with and approved by the Insurance Commissioner,
Indemnity's pet age factor remained constant over the life of the policy. In practice however,
Indemnity increased the age factor annually on the policy anniversary.
32. Indemnity's various rate errors billed 6,515 Washington policies as follows: Expected Premium Using Aooroved Rates Premium Collected Difference ( overchar.1<e) Difference plus 8% interest
CONSENT ORDER LEVYING A FINE ORDER NO. 19"0231
6
$2,434,540 $2.555,800
$121,260 $127,373
State of Washington Office oflnsunmce Coinmissioner POBox40255 Olympia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I s I
JAN/21/2020/TUE 11 :00 AM FAX No. P. 008
33. RCW 48.19.040(6) states that [w]here a filing is required no insurer shall make or
issue an insurance contract or policy except in accordance with its filing then in effect, except as
is provided by RCW 48.19.090. By using rates different from those filed with and approved by the
Insurance Commissioner, ACE repeatedly violated RCW 48.19.040(6). By utilizing the experience
rating plan contrarily to the language filed with and approved by the Insurance Commissioner,
both Companies repeatedly violated RCW 48.19.040(6). By increasing the pet age factor contrary
to the language filed with and approved by the Insurance Commissioner, Indemnity repeatedly
violated RCW 48. l 9.040(6). By capping the applicable discounts at 10% total where the language
filed with and approved by the Insurance Commissioner contained no such limitation, the
Companies repeatedly violated RCW 48.(9.040(6).
34. RCW 48.18.2901(1)(6) states that [e]ach insurer must renew any insurance policy
subject to RCW 48. l 8 .290 unless [ a Jt least twenty days prior to its expiration date, the insurer has
communicated, either directly or through its agent, its willingness to renew in writing to the named
insured and has included in that writing a statement of the amount of the premium or portion
thereof required to be paid by the instll·ed to renew the policy, and the insured fails to discharge
when due his or her obligation in connection with the payment of such premium or portion thereof.
By increasing the base rates at policy renewal without providing a compliant notice of the rate
adjustment 20 days before the renewal date, the Companies repeatedly violated RCW
48.18.2901 (l)(b).
35. RCW 48.19.430 states that [a]ny person violating any provision of this chapter shall
be subject to a penalty of not more than fifty dollars for each such violation, but if such violation
is found to be willful a penalty of not more than five hundred dollars for each such violation may
be imposed. Such penalties may be in addition to any other penalty provided by law.
36. RCW 48.05.[85 provides that after hearing or with the consent of the insurer and
in addition to or in lieu of the suspension, revocation, or refusal to renew any ce1tificate ofauthority
the Insurance Commissioner may levy a fine upon the insurer in an amount not less than two
hundred fifty dollars and not more than ten thousand dollars.
ACE Violations.
37. By allowing the Healthy Paws website to operate without identifying ACE as the
insurer, allowing Healthy Paws to send emails that did not identify ACE as the insurer, allowing
CONSENT ORDER LEVYING A FINE ORDER NO. l 9"0231
LA - 1589890 - 1
7 State of Washington Office of Insurance Commissioner l'OBox40255 Olympia, WA 98504"0255
09:~7:o~ ~.m. 01-21-2020 I 9 I
JAN/21/2020/TUE 11 :01 AM FAX No. P. 009
Healthy Paws to distribute brochures that did not identify ACE by name or provide ACE's
domicile, failing to identify its legal name on Healthy Paws' website, and using rates different
from those filed with and approved by the Insurance Commissioner, ACE repeatedly violated
RCW 48.05.190(1), WAC 284-30-670(4), RCW 48.30.050, and RCW 48.19.040(6),justifying the
imposition of a fine under RCW 48.05.185 and RCW 48. 19.430.
Indemnity Violations
38. By allowing Healthy Paws to produce policies for Indemnity without being
properly appointed, using outdated declarations pages in its pet health insurance policy forms and
pet health insurance notices for 1, I 80 Washington consumers and 1,509 pets, and increasing the
pet age factor annually contrary to language filed with and approved by the Insurance
Commissioner indicating the pet age factor remained constant over the life of the policy, Indemnity
repeatedly violated RCW 48.17.160(1), RCW 48.17.160(2), RCW 48.18.140(2)(f), RCW
48. I 8.520, RCW 48.l 8.100(1), and RCW 48.19.040(6),justifying the imposition of a fine under
RCW 48.05.185 and RCW 48.19.430.
Ace and Indemnity Violations,
39. By cancelling consumer policies without providing a compliant IO day advance
notice, allowing Healthy Paws to circulate inaccmate information about the required cancellation
procedure, producing documents with inconsistent information on said cancellation procedure,
using the pet health change policy form as a renewal despite the form language explicitly
prohibiting such use, applying the experience rating plan contrary to the approved filing, capping
the applicable discounts at 10% total where the filing contained no such limitation, and increasing
rates at the anniversary adjustment without providing 20 business days advance notice of the rate
adjustment, the Companies repeatedly violated RCW 48.18.290(1)(c), RCW 48.30.090, RCW
48.18.140(2)(f), RCW 48.18,520, RCW 48.18.100(1), RCW 48.19.040(6), and RCW
48.18.2901(1 )(b),justifying the imposition of a fine under RCW 48.05.185 and RCW 48, 19.430.
CONSENT TO ORDER:
The Insurance Commissioner of the state of Washington and the Companies agree the best
interest of the public will be served by entering into this Order. NOW, THEREFORE, the
CONSENT ORDER LEVYING A FINE ORDER NO, 19-023 I
LA - 1589890 - I
8 State of Washington Office of Insurn11ce Co1nmissioner POBax40255 Olyinpia, WA 98504"0255
09:~7:o~ ~.m. 01-21-2020 I 10 I
JAN/21/2020/TUE 11 :01 AM FAX No. P. 010
Companies consent to the following in consideration of their desire to resolve this matter without
further administrative or judicial proceedings. The Insurance Commissioner consents to settle this
matter in consideration of the Companies' payment of a fine, and upon such terms and conditions
as ate set forth below:
I. The Companies acknowledge their duty to comply fully with the applicable laws of
the state of Washington.
2. The Companies consent to the entry of this Order, waive any and all hearing or
other procedural rights, and further administrative or judicial challenges to this Order.
3. The Companies agree to withdraw the demand for hearing previously filed in this
matter under Order No. 19-0231, Docket No. 08-2019-INS-00064.
4. The Companies and the Insurance Commissioner jointly request Administrative
Law Judge Mal1in enter an order terminating the proceedings in accordance with this Order.
S. By agreement of the pal1ies, the Insurance Commissioner will impose a fine of Nine
Hundred and Fifty Thousand Dollars ($950,000.00), liability for which is joint and several between
ACE American Insurance Company and Indemnity Insurance Company of Nmth America (the
Chubb Group), and suspend Two Hundred Thousand Dollars ($200,000.00) of that, on the
conditions that:
a. The Companies pay Seven Hundred and Fifty Thousand Dollars
($750,000.00) by January 17, 2020,
b. The Companies commit no further non-De Minimis violations of the
statutes and/or regulations that are the subject of this Order for a period of
two (2) years from the date this Order is entered;
c. The Companies comply with and carry out the Compliance Plan set forth in
Exhibit A hereto, which Compliance Plan is hereby incorporated into this
Order by reference as though fully set fol1h herein.
d. The Companies will make whole all Washington consumers whose rate was
over charged at any prior time by payment of the sum of Four Million, Four
Hundred Seventy Four Thousand, Five Hundred Eighteen Dollars
($4,474,5 I 8.00), together with simple interest at eight percent (8%)
calculated from May IS, 2019 until December 31, 2019 (totaling Two
Hundred Twenty Five Thousand, Five Hundred Sixty Five Dollars
CONSENT ORDER LEVYING A flNE ORDER NO. 19"0231
9 State of Washington Office ofinsurance Co1n1nissioner PO Box40255
LA· 1589890 - l Olympia, WA 98504-0255
09:~7:o~~-m.01-21-2020 I 11 I
JAN/21/2020/TUE 11 :01 AM FAX No. P. 011
($225,565 .00)), and provide proof to the Insurance Commissioner that such
t·efunds have been made. This proof shall be provided to the Insurance
Commissioner by April 15, 2020, The refunds and interest will be
distributed to consumers, based on a mutually agreed upon process between
the Companies and the Insurance Commissioner.
6. The suspended portion of this fine will be imposed at the sole discretion of the
Insurance Commissioner according to the conditions as set forth in Exhibit A, without any right to
hearing, appeal or advance notice. The suspended portion of the fine will be paid within thi1ty (30)
days of the entry of an Order imposing it. Failure to pay the suspended portion of the fine when
imposed shall constitute grounds for revocation of the Companies' certificate of authority.
7. The Companies understand and agree that any futiher failure to comply with the
Insurance Code (RCW 48.05.190(1), RCW 48, I 7.160(1), RCW 48.l 7.160(2), RCW 48.18.100(1),
RCW 48.18.140(2)(f), Rew 48.18.290(\)(c), RCW 48.18.520, RCW 48.l8.290l(l)(b), RCW
48.19.040(6), RCW 48.30.050, RCW 48.30.090, and WAC 284-30-670(4)) or failure to comply
with the Compliance Plan constitutes grounds for further fines, penalties, and actions which may
be imposed in another order in direct response to further violations. De Minimis violations of the
statutes and/or regulations that are the subject of this Order will not be considered violations of the
Compliance Plan set forth in Exhibit A.
8, The Companies and/or their affiliates will, upon approval by the Insurance
Commissioner, implement new rating plans for all policies on a going forward basis in compliance
with Washington law. The Companies will necessarily be using their cut'l'ent rating from the time
of entry of this Order until such time as the new rating plans have been approved, Any violations
of the Insurance Code provisions identified in this Order by the Companies due to the continued
use of the current rating plan prior to the Insurance Commissioner's approval of a new rating plan
are hereby incorporated into the violations identified above, So long as the Companies and their
affiliates cooperate in a timely manner with the Insurance Commissioner during the approval and
implementation process for the new rating plan, further enforcement action will not be taken
related to continuing violations due to the continued use of the current rating,
9. This Order and the violations set forth herein constitute admissible evidence that
may be considered in any future action by the Insurance Commissioner involving the Companies.
However, the facts of this Order, and any provision, finding, or conclusion contained herein does
CONSENT ORDER LEVYING A FINE ORDER NO. 19-0231
LA - 1589890 - l
State of Washington Office oflnsurance Cotn1nissioner PO Box40255 Olympia, WA 98504-0255
09:~7:o~ ~.m. 01-21-2020 I 12 I
JAN/21/2020/TUE 11 :02 AM FAX No. P. 012
not, and is not intended to, determine any factual or legal issue or have any preclusive or collateral
estoppel effects in any lawsuit by any party other than the Insurance Commissioner.
EXECUTED this __ __,_,/ 5.,_·_·"'--__ day of __ ..,_.:ft."',2""w1..,11JJ>Jt1,._y __ _,, 2020.
ACEA
Printed Name: __ _,_1.i,l""V"'ii/'--'-f.,,).'--'-1~"1/l'"ITT'i'f"'f _______ _
Printed Corporate Title:, __ _..J:.l,;J/,th/J6h:w&u/J:ul_ju.J,Q~!t,.1!1M>l,S.11,£1-I ---------
EXECUTED this __ ,L/f;,_tP.. __ day of _ _,JA=IIIJ...,~,..Ou.€.>i-y---' 2020.
Y INSUK.f},t}ff._: NY OF NORTH AMERICA
By:. __ -1--~----·---i''-------"~+-----y
Printed Name·,, ___ _,_/~1.15,;LJv ILAIAl_,_f).,., ....J~cuflu,ll)u,fci.E ______ _
Printed Corporate Title:. __ ....,__()!.LJ'4'!.l!/!!afllw:ifl..1.l-1.(!.E.uw6ll.ll•eu1a.J' /"--______ _
AGREED ORDER:
Pursuant to the foregoing factual Basis and Consent to Order, the Insurance Commissioner of the
state of Washington hereby Orders as follows:
J. The Companies shall pay a fine in the amount of Seven Hundred and Fifty
Thousand Dollars ($750,000.00) to be paid by January 17, 2020,
2, The sum of Two Hundred Thousand Dollars ($200,000.00) is suspended on the
condition that the Companies fully comply with the Insurance Code (including the insurance
CONSENT ORDER LEVYING A FINE ORDER NO. 19-0231
LA - 1589890 • I
11 State of Washington Office oflnsuranca Co1nmissioner POBox40255 Olympia, WA 98504-0255
09:~7:0~ ~.m. 01-21-2020 I B I
JAN/21/2020/TUE 11 :02 AM FAX No. P. 013
regulations and statutes) of the state of Washington and upon the further condition that the
Companies fully carry out their obligations under the Compliance Plan attached hereto as Exhibit
A. The Companies will also make whole all consumers whose rate was over charged at any prior
time by payment of the sum of Four Million, Four Hundred Seventy Four Thousand, Five Hundred
Eighteen Dollars ($4,474,518), together with simple interest at eight percent (8%) calculated from
May 15, 2019 until December 31, 2019 (totaling Two Hundred Twenty Five Thousand Five
Hundred Sixty Five Dollars ($225,565.00)), and provide proof to the lnsuranc.e Commissioner that
such refunds have been made. This proof shall be provided to the Insurance Commissioner by
April 15, 2020. The refunds and interest will be distributed to consumers based on a mutually
agreed upon process between the Companies and the Insurance Commissioner.
3. De Minimis violations aside, the Companies understand and agree that any further
failure to comply with the lnsurnnce Code (including the insumnce rngulatibns and statutes) or
failure to comply with the Compliance Plan constitutes grounds for further fines, penalties, and
actions which may be imposed in another order in direct response to further violations.
4. The Companies hereby withdraw their demand for hearing filed under Order No.
19-023 I, Docket No. 08-20 l 9-INS-00064.
5. This Order and the violations set forth herein constitute admissible evidence that
may be considered in any future action by the Insurance Commissioner involving the Companies.
However, the facts of this Order, and any provision, finding, or conclusion contained herein does
not, and is not intended to, determine any factual or legal issue or have any preclusive or collateral
estoppel effects in any lawsuit by any party other than the Insurance Commissioner.
ENTERED at Tumwater, Washington, this-~/ _+~-4-h_ day ;coecf_J=a'-"11"-l.\-'<>.-ry-1------'' 2020.
MIKE KREIDLER Insurance Commissioner
By and through his designee . fli!_u:_ DANIEL JA:COBS Tns11rance Enforcement Specialist Legal Affairs Division CONSllNT ORPllR LEVYING A flNE ORDllR NO. 19-0231
LA· 1589890 • l
12 State of Washington Offic~ oflnsurance Commissioner POBox40255 Olympia, WA 98504-0255
10:~7:12~.m.01-21-2020 I 1 I
JAN/21/2020/TUE 11 :59 AM
MIKE KREIDLtl!. STATE INSURANCE COMMISSIONEl!.
FAX No.
STATE OF WASHINGTON
· OFFICE OF INSURANCE COMMISSIONER
FAX COVER SHEET
January 21, 2020
Please delivei the following 1 pages plus covei sheet:
TO: TJ Martin, Administrative Law Judge Office of Administrative Hearings
FAX No: (253) 593-2200.
COMMENTS:
P. 001
LEGAL AFFAIRS DIVISION P.O. llox 40255
Olympia WA 98504-0255 Fax No. (360) 586-0152
In Re: ACE American Insurance Company and Indemnity Insurance Company of North America OAR Docket No. 08-2019"INS-00064; Agency No. 19-0231
Attached is the Certificate of Mailing that was left off of the fal: below sent to OAR earlier today advising:
Thls matter has been resolved between ACE American Insurance Company and Indemnity Insurance Company of North America, collectively known as the Chubb Group (Collectively referred to as "the Companies") and the OIC. Pending your review, the Hearing scheduled for July 13, 2020 to July 17, 2020, is no longei necessary.
The OIC respectfully request that you entei an appropriate ordei teiminating the hearing and forward the same to the parties as soon as possible. The first 12 pages of the Consent Order Levyiog a Fine, Order No. 19-0231 resolving this matter between the Companies and the OIC is attached. A copy of the full Ordei is being mailed to OAR today.
FROM: Fax No.: (360) 664-2782 Voice No.: (360) 725-7064
If there is a problem receiving this fax or with the partial filing, please call Daniel Jacobs at (360) 725-7064.
NOTE TIIlS FAX TRANSMISSION IS fNTENDED ONLY FOR TIIB ADDRESSEE SHOWN ABOVE. Ir MAY CONTAIN IN!'ORMATION THAT IS PRIVILEGED, CONFIDENTIAL, OR OTHERWISE PROTECTED FROM DISCLOSURE. ANY REVIEW, DISSEMfNATlON, OR USE OF THIS TRANSMISSION OR ITS CONTENTS BY PERSONS OTHER THAN THE ADDRESSEE !S STRlCTLY PROHIBITED. IF YOU HA VE RECEIVED THIS TRANSMISSION fN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE AND MAJL TIIB ORlG!NAL TO US AT THE Al3OVE ADDRESS, THANK YOU.
Rev. 01/ZJ/20
10:~7:12~.m.01-21-2020 I 2 I
JAN/21/2020/TUE 11 :59 AM FAX No. P. 002
CERTIFICATE OF MAILING
The undersigned certifies under the penalty Qf perjury under the laws of the state
of Washington that I am now and at all times herein mentioned, a citizen of the United
States, a resident of the state of Washington, over the age of eighteen years, not a party to
or interested in the above-entitled action, and competent to be a witness herein.
On the date given below I caused to be served the foregoing OIC Notice that this
case has settled and request to enter an appropriate order terminating the hearing and
forward the same to the parties on the following individuals as indicated below:
TJ Martin, AU Timothy S. Farber, Locke Lord LLP Office of Administrative Hearings 111 South Wacker Drive 2420 Bristol Court SW Chicago, IL 60606 Olympia, WA 98502 [email protected]
Via facsimile and by depositing in the U.S. Via Email mail via state Consolidated Mail Service Respondent Representative with nroner nosta<>e affixed.
Dated this 21" day of January, 2020, in Tumwater, Washington.
i'~?!J.~..,d,v Christine M. Tribe Paralegal Legal Affairs Division
CERTIFICATE OF MAILING DOCKET NO. 08-2019-INS-00064 AGENCY NO. 19-0231
1589890
1 State of W asbington Office of the Insurance Commissioner
PO Box40255 Olyrnpia, WA 98504-0255